Health Care Counsel

Arent Fox's health care law blog offers news, analysis, and insights for the health care industry.

Health Care Counsel

Blog Posts by Erin E. Atkins

Prescription Drug Pricing & Government Price Reporting
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Pharma Industry Take Note: Maryland Passed Price-Gouging Prohibition
Alleged price gouging by drug manufacturers and distributors has been in the news the past several years, causing many lawmakers to threaten to take action. Maryland has become the first state to do so – on May 26, 2017, Governor Larry Hogan of Maryland informed the Maryland Speaker of the House that he would permit H.B. 631, also known as the “Prohibition Against Price Gouging for Essential Off-Patent or Generic Drugs”(437th Gen. Assemb., Reg. Sess. (Md. 2017)) to become law. The Act takes effect October 1, 2017, and makes Maryland the first state in the nation to prohibit “price gouging” by manufacturers or wholesale distributors of generic prescription drugs. Of note, Governor Hogan did not sign the bill into law, rather he decided not to veto it, rendering the bill law after 30 days.
 
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Prescription Drug Pricing & Government Price Reporting
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Reminder to Generic Manufacturers: Q1 2017 Unit Rebate Amounts Billed by State Medicaid Programs Will NOT Include Additional Discounts

Pursuant to the Bipartisan Budget Act of 2015, manufacturers participating in the Medicaid Drug Rebate Program must pay an Additional Discount on Non-Innovator products to the extent the Average Manufacturer Prices (“AMPs”) of their products are rising faster than inflation when compared to a base line period. However, the Centers for Medicare & Medicaid Services (“CMS”) stated in April 14, 2017 e-mail correspondence to manufacturer technical contacts listed for the Drug Data Reporting for Medicaid System (“DDR”) that DDR system updates needed to automate the Additional Discount calculation on Non-Innovator products were not finalized in time and, as such, first quarter 2017 Unit Rebate Amounts for Non-Innovator products will NOT include the calculated Additional Discount, if any.

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E-Health, False Claims Act, Telemedicine & E-health
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Not Just for Health Care Providers Anymore: Health IT Vendor Pays $155 Million to Settle False Claims Act Case
Last week, eClinicalWorks (ECW)—an electronic health records (EHR) vendor—settled an intervened False Claims Act case with the Department of Justice for $155 million. This novel FCA settlement illustrates that health care fraud prosecution extends far beyond just the health care providers and payors that directly submit claims to Medicare, Medicaid and other federal health care programs, and can extend liability to subcontractors, agents, and vendors.
 

EHR Tech Must Meet “Meaningful Use” Standards

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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HRSA Delays Effective Date of 340B Final Rule…Again

In a notice published in the Federal Register on Friday, May 19, 2017, the Health Resources and Services Administration announced that it would further delay the effective date of a final rule applicable to all drug manufacturers participating in the 340B Drug Pricing Program.

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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Implementation and Enforcement of 340B Final Rule Delayed

In a Federal Register notice scheduled to be published on March 20, 2017, the Health Resources and Services Administration (HRSA) announced that it will delay the effective date of the January 5, 2017 final rule (the Final Rule) that provided guidance on the calculation of drug ceiling prices and the imposition of civil monetary penalties on certain drug manufacturers participating in the 340B Drug Pricing Program. Arent Fox’s Health Care Counsel Blog previously featured an analysis of the Final Rule, which can be found here

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Office of Inspector General Developments, Prescription Drug Pricing & Government Price Reporting
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New OIG Drug Pricing and Reimbursement Portfolio Now Online

Have you been wondering what OIG has done regarding drug pricing and reimbursement since 2010? Today, OIG has made it easier to find out, posting a Drug Pricing and Reimbursement Web portfolio on its website. According to an OIG announcement, the portfolio “pulls together the HHS OIG’s body of work since 2010 as well as other relevant items that relate to drug pricing and reimbursement in HHS programs. The portfolio features planned work, completed reports, industry guidance, and enforcement actions.”  

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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New Year…Same Rules? HHS Makes Few Changes in Recent 340B Drug Pricing Program Final Rule
The Health Resources and Services Administration, part of the Department of Health and Human Services, published a Final Rule on January 5, 2017 addressing how 340B covered outpatient drug “Ceiling Prices” are to be calculated under the 340B Drug Pricing Program, and how participating drug manufacturers may be subject to certain monetary penalties for violation of the 340B statute (the Final Rule). The provisions of the Final Rule are effective March 6, 2017, and HHS indicated that it will begin enforcing the requirements of the Final Rule at the beginning of the second quarter of 2017, meaning April 1, 2017. 
 
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Prescription Drug Pricing & Government Price Reporting
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340B Drug Pricing Program Ceiling Price Final Rule Released

The 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties final rule is scheduled to be published in the Federal Register on January 5, 2017. A link to the advance copy of the final rule can be accessed here. Arent Fox health care partner Stephanie Trunk and associate Erin Atkins will be publishing a detailed client alert soon, in which they will analyze the provisions of the final rule and how they impact 340B covered entities and participating drug manufacturers. Please stay tuned to the Health Care Counsel blog for further updates!  

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Office of Inspector General Developments, Prescription Drug Pricing & Government Price Reporting, Product Coverage & Payment, Wholesaler & Pharmacy Benefits Compliance
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Is the Discount Safe Harbor No Longer “Safe?”

In a ruling that could, if adopted by other courts, expose all pharmaceutical discount and rebate arrangements to anti-kickback liability, on August 23, 2016, Judge Rya Zobel in the United States District Court for the District of Massachusetts denied Omnicare, Inc.’s motion for summary judgment in United States ex rel. Banigan v.

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting
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Vermont Publishes First List of Pharmaceuticals for Transparency Reporting

Vermont has published the first list of pharmaceutical products for which manufacturers are required to submit annual price transparency reports. The list is available on the Vermont Office of Attorney General website. Prescribed forms are available for reporting there as well. Reports are due on or before October 1, 2016.

To download the Drug List Per Act 165, click here.

To download the Drug Manufacturer Instructions, click here.

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Affordable Care Act
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New Dispute Resolution Process Finally Proposed for 340B Program: Abundant Opportunity for Comment by Stakeholders

On August 12, 2016, the Health Resources and Services Administration published a proposed rule setting forth the requirements and procedures of the administrative dispute resolution process applicable to all covered entities and drug manufacturers participating in the 340B Drug Pricing Program. Comments on the Proposed Rule are due on or before October 11, 2016.
 

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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CMS Releases Covered Outpatient Drug Final Rule FAQs

On July 6, CMS issued a set of Frequently Asked Questions to respond to questions raised by the Covered Outpatient Drug Final Rule that was published on February 1, 2016.  The FAQs can be accessed here; our January 28 article analyzing the final rule can be accessed here and our analysis of the delayed implementation of the revised 5i AMP methodology and 70/30 test can be found here.

For more information regarding the Covered Outpatient Drug Final Rule, please contact Stephanie Trunk or Erin Atkins in our Washington, DC office or the Arent Fox attorney who regularly handles your matters
 

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Prescription Drug Pricing & Government Price Reporting
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Vermont the First State to Require Pricing Justification from Drug Manufacturers

Rising prescription drug costs have been big news this year, and states are beginning to respond.  On June 3, 2016, the Governor of Vermont signed into law bill S.216, “An act relating to prescription drug formularies” (the “Law”).  The Law is designed to understand the drivers of rising prescription drug costs, and, among other things, will require all health insurers offering plans under the Vermont Exchange to make detailed information available to their enrollees, the public, and health care providers regarding drugs covered under the plan’s formulary, the cost-sharing amounts for those drugs, and any prior authorization, step therapy, or utilization management requirements. 

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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Texas Adopts NADAC and Eliminates Some Manufacturer Reporting

Texas Health and Human Services Commission (HHSC) has finally issued final regulations transitioning to the use of the National Average Drug Acquisition Cost (NADAC) to establish Medicaid ingredient cost reimbursement instead of utilizing manufacturer-reported prices.   As such, effective May 16, 2016, pharmaceutical manufacturers will not be required to provide monthly calculations of Average Wholesale Price, Price to Wholesaler/Distributor, Direct Price to Pharmacy, Direct Price to Chain Pharmacy and Direct Price to Long Term Care Pharmacy to HHSC beginning in June 2016. 

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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New VA Policy: All Covered Drugs, Regardless if Compliant with the Trade Agreements Act, Must Be Offered

The Department of Veterans Affairs (VA) recently announced a significant policy change that will now require drug manufacturers to make drugs that are “covered drugs” under the Veterans Health Care Act (VHCA) available to the VA under the manufacturer’s Federal Supply Schedule (FSS) contract, even if those drugs are not compliant with the requirements of Trade Agreements Act (TAA). The announcement from the VA establishes aggressive deadlines for compliance, which manufacturers should note.
 

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Guidance to Pharma from CMS: How to Calculate the New Inflation-Based Additional Rebate for Generic Drugs

On April 15, 2016, the Center for Medicaid and CHIP Services, a part of the Centers for Medicare & Medicaid Services (CMS), issued a Program Notice to participating drug manufacturers (the Notice) which provides some guidance on how generic drug manufacturers are to calculate the new Additional Discount on generic drugs that will become part of the rebate due state Medicaid programs under the Medicaid Drug Rebate Program.
 

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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HHS Re-Opens Comment Period on 340B Program Pricing and Penalty Rule

Today, the Department of Health and Human Services (HHS) announced that they are re-opening the comment period on its June 17, 2015 proposed rule (the Proposed Rule) concerning establishment of the “Ceiling Price” for covered outpatient drugs (340B drugs) and assessment of penalties against manufacturers for violation of 340B pricing rules. Arent Fox LLP previously provided an analysis of the Proposed Rule on our blog, Health Care Counsel, which you can access here
 

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting
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CMS Delays Implementation of Revised 5i Average Manufacturer Price (AMP) Methodology and 70/30 Test until July 1, 2016

On March 31, 2016, CMS published a Manufacturer Release delaying implementation of the revised 70/30 test which manufacturers are to utilize to assess whether a 5i drug is generally dispensed at retail, as well as the 5i AMP methodology prescribed in the final AMP rule and codified at 42 CFR 447.504, until July 1, 2016.  CMS cautions manufacturers they are required to timely file monthly and quarterly AMPs and to document their reasonable assumptions supporting their calculations.  

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Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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Alternative, Value Based Payment Models Reach Part B Drugs

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule on March 8, 2016 (published in the Federal Register on March 11, 2016) which could fundamentally change the way in which drugs administered in the physician office or hospital outpatient department settings (generally referred to here as Part B Drugs) are reimbursed by the Medicare program. If finalized, the Proposed Rule would represent the most dramatic change in Part B Drug reimbursement since the enactment of the Medicare Modernization Act and has the potential to significantly redistribute and potentially reduce the $20 billion in reimbursement currently available to physicians and hospitals that furnish such drugs.

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Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.